Senior Tories Accuse Chinese Interests of Exploiting Coronavirus Crisis to Dominate UK Tech

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JOHANNES EISELE/AFP/Getty Images
Victoria Friedman

MP Tom Tugendhat has accused China of taking advantage of the Wuhan coronavirus crisis to take control of British companies, and Iain Duncan Smith has attacked Huawei for exploiting the pandemic to attempt to boost its role in the UK’s 5G development.

Mr Tugendhat, who is the chairman of the House of Commons Foreign Affairs Select Committee, told Sky News on Wednesday: “We’re seeing quite a lot of action by the Chinese state, or state-owned companies, that seem to be exploiting this moment.”

“Companies like Imagination Technologies… it’s been facing a rather hostile change in management in the last few weeks, which happened to coincide not just with the COVID crisis but also the prime minister being taken into hospital and the Easter weekend,” the MP added.

On Tuesday, the Commons summoned the Chinese owner of UK-origin chip designer Imagination Technologies over concerns the leadership will transfer the ownership of sensitive security software to other companies controlled by China’s communist government, risking the security of British, American, and European networks.

Chinese state-owned investment firm Canyon Bridge bought the Hertfordshire-based company in 2017, with the blessing of then-Prime Minister Theresa May. Canyon Bridge is owned by investment fund China Reform, which is also controlled by the Chinese government. Mrs May allowed the takeover as at the time Canyon Bridge was based in the U.S. and regulated by American law. The company has since relocated its headquarters to the Cayman Islands.

Nearly two weeks ago, China Reform attempted to stage a boardroom coup to appoint four of its own members to the leadership of Imagination Technologies. The takeover attempted was cancelled.

Mr Tugendhat told the BBC on Tuesday that the government was concerned that under Chinese control, technologies that had been developed by Imagination Technologies could be used to design “backdoors” into the strategically-important digital infrastructures of the UK and her allies.

“Whoever writes the code, writes the rules for the world, more than any regulation passed by bureaucrats. There’s no point in taking back control from Brussels, only to hand it over to Beijing,” Mr Tugendhat said.

The EU’s competitions chief Margrethe Vestager told the Financial Times on Sunday that due to the economic effects of coronavirus, European companies are vulnerable to takeover by Chinese companies. Germany has already worked on regulations to intervene in the foreign acquisition of domestic companies.

Brexit Party leader Nigel Farage has warned that China is hoping for a “fire sale” of British businesses decimated by the economic effects of the Chinese coronavirus to buy “vast swathes of our strategic and manufacturing industries”.

Huawei’s UK chief executive Victor Zhang complained bitterly this week at the perceived unfair “attacks” on the Chinese company, claiming that to deny the tech firm access to developing the UK’s 5G “would do Britain a disservice”.

“When we emerge from this crisis, we look forward to continuing to play our role as a key partner in improving the networks, benefiting the economy and ultimately everyone in the UK, ending the postcode lottery of good connectivity,” Mr Zhang added.

Prime Minister Boris Johnson has given his consent to the company helping to develop Britain’s 5G, despite the warnings from Five Eyes intelligence partners Australia and the United States that the move represented a security risk.

Iain Duncan Smith, one of the most vocal MPs to oppose Huawei’s involvement, condemned the company’s attempt to use the coronavirus crisis to further its interests.

“This letter from Huawei is hubristic and arrogant. To try and use this terrible pandemic with its roots in China and their information suppression, as an opportunity to promote Huawei’s interests in the UK is disgraceful,” Mr Duncan Smith said, according to The Telegraph.

“The issue facing the free world, including the UK once this dreadful pandemic is over, is how to rebalance and eradicate our appalling dependency on China.

“After all, the global free market requires for its proper functioning that all engaged in it observe the international rules-based order, at the heart of which is the rule of law and adherence to human rights.

“None of these can be ascribed to China, and that is why we in the UK should ignore Huawei’s untimely special pleading and stop kowtowing to this authoritarian regime.”

Former Chancellor of the Exchequer Sajid Javid called for an investigation into whether the Chinese state covered up coronavirus, which originated in Wuhan. He said on BBC Radio 4’s Today programme on Wednesday: “China, for example, didn’t even admit to human-to-human transmission until some time in January, which was very late in the day. I think it’s a legitimate question to ask, what they knew, when, and how that could have made a difference.”

Former MI6 chief Sir John Sawers also told the BBC programme that “China is evading a good deal of responsibility for the origin of the virus, for failing to deal with it initially.”

Whether there is the political appetite in the Conservative government’s Cabinet for calling China to account remains to be seen, particularly in light of claims that the acting deputy for the prime minister, First Secretary of State Dominic Raab, had promised China that Britain would not “politicise” the Chinese coronavirus.

The Chinese embassy in London claimed: “Mr Raab expressed the UK’s firm opposition to politicising the outbreak and fully agrees with China that the source of the virus is a scientific issue that requires professional and science-based assessment.”

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